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Rand Waddoups - Walmart

Customers value time just as much as money

One of the key themes driving growth in Walmart's omni-channel strategy, is that customers value time just as much as money when it comes to making purchases.

Senior Director Omnichannel, Rand Waddoups says the company is no longer just a 'bricks and mortar' or just an E-commerce store - but they have to be both. That puts the focus back on the needs of the customer, and their behaviour, rather than the needs of the seller.

"Our CEO told an investment meeting that it is our job to take anything that our customers don't like about shopping that can be removed through technology, and remove it," he said. "From a total customer lifetime stand point, an omnichannel customer is worth two times a non-omnichannel customer. That means the act of converting a customer who is only buying in the store or only buying online, to be buying in both, will double the value of the customer. That is a massive change. So, it matters a tremendous amount that we have tight partnerships between industry, suppliers and retailers as we move into this omni-work."

While Mr Waddoups acknowledges that Amazon is a major competitor for Walmart, he says the whole of retail is moving into this space rapidly and needs to be watched closely.

"The really fun thing that is happening right now is that because of all the change that is happening at any given moment, there is so much to see," he said. "My favourite times in retail are when there are disruptions, because little players come up. Maybe they are not big competitors or dominant players, but they are doing interesting things. They are who we learn the most from."

He adds that it is ultimately the service of each company that is key to their success in not only attracting but maintaining their customer base - and saving time is a very important step.

"If you look at what happens in a pick-up experience, an average person has a five times perception level," Mr Waddoups. "(For example) let's say 20 seconds, while I am waiting for something in a store feels like 100. Go ahead and have someone watch a clock while you wait for something in retail, and I promise you it will feel like 4-5 times longer than what it actually is."

Several initiatives to counter these 'inconveniences' for customers have been introduced at Walmart, including pick-up towers, where a person just has to scan a mobile phone to access the product in a locker. There is also a pick-up in store option, where a customer just has to drive to a loading dock and a member of staff will load all the pre-ordered groceries into the vehicle - saving time and effort. Mr Waddoups adds that quite often this method is coinciding with larger baskets, over the $100 price range, which makes it a worthwhile investment to keep the customer happy.

Walmart has also built up its delivery capabilities, with 650 stores that covers 40 per cent of the total United States' population - and that is expected to double over the next 12 months. But just as many changes are happening at a digital level, with Walmart purchasing nine companies in the last three years.

"They expand across all types of industries," Mr Waddoups said. "What we are building are new capabilities across areas that Walmart is not known for - for example fashion apparel. Bonobos for those who don't know are an excellent men’s brand with high prices. So, this is the $150 pair of jeans that you may or may not want to have and don't normally live in the world of the Walmart customer. But they are absolutely the customer that we didn't have access to - but we do now through these experiences."

He explained to the Amsterdam Produce Summit his seven main keys to making omni-channel shopping a success. The first is ensuring that businesses can 'supply everything that is shown online, and that everything that can be sold is shown online'. This means that retailers are giving suppliers every chance to have their product seen by and sold to consumers.

The second point is the information that suppliers put into item files, needs to give retailers the best chance of selling the product. This means choosing the best wording for the product, and accompanying it with the best imagery.

"There's also opportunities around recipe options, or to teach consumers what to do with the product," Mr Waddoups said. "For example, is it a microwavable bag or a just a normal bag? Would it be good to know these things? Of course, it would. Also, ratings and reviews (are important) because trust is primarily driven by your ability to connect with individual people. Our customers clearly tell us that despite the fact one-on-one interaction is better, a small step below that is being able to read ratings and reviews. It's still a very important and effective way of telling customers that you have a high-quality item. So, make sure you are focused on your item content in a way that allows you to sell the best stuff possible."

He adds that ensuring that different Global Trade Item Numbers (GTIN) and Universal Product Codes (UPC) are used for each individual item.  This ensures the customer knows exactly what product they are getting right down to the variety, size and colour. While another factor is training the staff (in tasks such as produce sorting and packing) to make them better to ensure high product quality. The fourth point is putting as much time and energy into the experience from getting the product from the shelf to the home table, as much as the process from getting it from the field to shelf.

While it can pose a financial dilemma when the product's value is far less than the cost to ship the product to the customer, he adds that it can also provide an opportunity for businesses to upscale the product.

"Produce  is going to become more in the 'ship to home' world not the pick-up world - so continue to think about how you upsize," Mr Waddoups said. "Instead of just selling a floret of broccoli, can you sell it with cauliflower and cabbage to make a recipe? You need to start thinking about how to create basket sizes to make the system work."

He concluded by running through the tools used by Walmart to reduce the friction experienced by the customer. One of these is the Walmart Pay, which is a mobile wallet that Mr Waddoups says particularly is utilised by women aged between 20-45, who do not like carrying around a purse while shopping. Another is the floor plans creating a unique experience, yet have every item easy to find through GPS like store maps. While figuring out more about the customer, and what is on their shopping list, he adds that it will not take companies long to start making suggestions and automatically compiling lists so the customer does not have to think too much about it.

However one of Walmart's main objectives is time saving.

"Nobody likes to wait in line, and all three of our services (Express Money, Pharmacy and Returns) were built to take away the need to wait in line," he said. "Now instead of waiting in line for something that takes 5-7 minutes, you walk up, scan a QR code authenticate yourself using your phone and you have everything done for you either pay or hand something back on return, and you are out the door. It literally goes to 20 seconds. The other is order ahead. If you would like a cake decorated for someone, for example, your only way in 99 per cent of situations now is to go to the store and tell the baker. In the U.S. we just launched the ability to do that online; you can now build the cake through a cake builder."

Mr Waddoups notes that a major advantage of having an omni-channel setup is that you ultimately know what type of experience the customer is seeking by their actions; if they are shopping from the couch or in the store, he says companies can then specifically develop and improve both sides of the equation.

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